CSO: House prices up 7.2% in year to August

House prices rose by 7.2% over the last year and economists now have to revise their projections for price inflation in 2017 thanks to the Government’s new help-to-buy scheme.
CSO: House prices up 7.2% in year to August

The residential property price index published yesterday by the Central Statistics Office shows that, while the national index is 33.7% lower than its highest level in 2007, prices nationally have risen by 45.6% since the “trough” in early 2013.

In Dublin, all residential property prices increased by 4.5% in the year to August. The index for all residential property prices in the rest of Ireland — excluding Dublin — increased by 11.4% in the year to August.

“The south-west region showed the greatest price growth, with house prices increasing 14.8%,” the CSO pointed out. “Conversely, the mid-east region showed the least price growth, with house prices increasing 5%.”

Conall Mac Coille of Davy Research said a geographical pattern remains with “more muted price gains in Dublin and its commuter belt”.

“The price gains are strongest in areas that have seen the slowest recovery so far,” he said. :In the Midlands, prices fell on the month by 0.5% but are still up 14.1% on the year. In the southwest, prices rose by 1.2% — up 14.8% on the year.

“As we had expected, Irish house prices have risen briskly through the summer months after a slow start to 2016. The RPPI index has now increased for five consecutive months, up by 5% in the three months to August.”

Mr Mac Coille said his organisation had expected Irish house price inflation to remain close to 5% through 2017 and 2018.

“However, the new help-to-buy scheme will now provide a tax rebate for first-time buyers of newly-built homes worth up to €20,000, or 5% of the purchase price, and should push up prices on newly-built homes,” said MR Mac Coille. “So we will now have to revise up our forecasts for Irish RPPI inflation to above 5% in 2017.”

Property Industry Ireland said the Residential Property Price Index showed that only 6.8% of transactions in August were for new dwellings.

“The help-to-buy scheme, available only for new homes, will help bring a new supply of homes onto the market,” it said.

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